By: DailyForex.com
The common currency edged lower against the greenback in Asian trading on Wednesday as investors speculate that the European Central Bank will take a more dovish stance at their rate setting meeting tomorrow. Speculators are pricing in a 25 basis points rate cut by the ECB, though there is growing hope and expectations that the central bank might surprise with an even larger cut of 50 basis points. Although easing would weigh on the currency in the longer term, the immediate impact will likely be a short-lived rally as risk appetite improves broadly.
As reported at 10:47 a.m. (JST) in Tokyo, the EUR/USD was trading at $1.2595, a decline of 0.1% but not too far from the low of $1.2559 struck on Tuesday. Resistance is seen immediately at $1.2693, last Friday’s high and support is at $1.2545 and then $1.2565.
The U.S. market is closed for the celebration of the Independence Day holiday today, but upon resumption, investors will eye the upcoming release of June labor data; first is the ADP release of private sector data on Thursday, seen as a fairly reliable gauge of the government’s non-farms payroll data which will be released on Friday. Analysts are forecasting that ADP’s data will show a decline to 97,000 new jobs from May’s 133,000, while NFP data forecasts predicting 90,000 new jobs from May’s 69,000.
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